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Why the GPT share price is on watch this morning

Kenneth Hall
Real Estate Investment Trust

The GPT Group (ASX: GPT) share price is on watch today after the Aussie REIT’s FY 2019 results release.

What did GPT report this morning?

For the year ended 31 December 2019, the S&P/ASX 200 Index (INDEXASX: XJO) REIT reported a statutory net profit after tax of $880.0 million.

GPT’s funds from operations (FFO) climbed 6.8% higher on the prior corresponding period (pcp) to $613.7 million. The group recorded valuation increases of $342.2 million during the year as FFO per stapled security climbed 2.6% to 32.68 cents.

Adjusted FFO finished 8.03% higher on pcp to $497.5 million in FY 2019.

The GPT share price will be worth watching today after the REIT lifted its distribution per security by 4% on pcp. GPT will pay security holders 26.48 cents per unit held.

In terms of its segments, the group’s Office and Retail segments continue to dominate. Office net income climbed 2.8% higher to $276.3 million while Retail edged 0.1% lower to $326 million.

GPT’s Logistics business performed well, as segment net income jumped 10.1% to $121 million. The Funds Management arm recorded an 8.7% increase in net income to $46.3 million in the year.

The GPT share price has edged higher in the last 12 months as net gearing has fallen 420 basis points (bps) to 22.1%. GPT has also decreased its weighted-average cost of debt to 3.6% and increased its interest coverage ratio to 6.7 times.

The ASX 50 REIT has been busy buying up properties in the last 12 months. GPT added two new assets to its Office portfolio for a combined purchase price of $857 million.

Positively, GPT’s Retail occupancy levels remain high at 99.6% despite some turbulence in the sector. 

Where is the GPT share price headed in FY 2020?

GPT is expecting a recovery in residential property, low interest rates and continued infrastructure spend to be supportive of economic growth in FY 2020.

The ASX REIT also announced guidance FFO per security growth and dividend per share (DPS) growth of 3.5% for the year ahead.

It could be a big year for the GPT share price as the company looks to benefit from strong markets in Sydney and Melbourne and improve its development pipeline for further growth.

The post Why the GPT share price is on watch this morning appeared first on Motley Fool Australia.

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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020